China’s Power and the Planet’s Pain: The Challenge of the Rare Earth Supply

The world runs on rare earth elements (REEs), a set of 17 metals indispensable for everything from EV batteries and wind turbines to your smartphone. While critical for the global green transition, their mining and processing are dominated by China and come at a steep price: massive environmental damage, toxic waste, and radioactive residues. With global demand expected to skyrocket by 2040, the urgent challenge is to ramp up recycling.

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By Sangeeta Jayadevan. 

Rare earth elements (REEs), a set of 17 elements, have acquired critical importance in recent years. They possess powerful magnetic and luminescent properties, making them critical for renewable energy infrastructure, electric vehicles, defense and tech devices like cellphones.  

While not exactly rare, they are present generally as trace impurities, bound closely with other similar elements. Their extraction and separation is costly and difficult since they are rarely present in concentrated deposits.  

Huge amounts of ores need to be excavated to yield a small amount of REEs, and multiple processing cycles and tests are needed to isolate them. Their extraction processes often involve toxic chemicals that can contaminate air, water, and soil, leading to significant environmental pollution. Mining of these elements can produce radioactive waste, posing health risks to nearby communities and ecosystems. Mining and processing one ton of REEs typically generates thousands of tons of waste material, including mine tailings, acidic wastewater, and radioactive processing residues.

Importance of Rare Earth Elements

REEs are often referred to as the invisible building blocks of modern society due to their breadth of uses in renewables and high-tech areas. No viable alternatives pose potential for disruption in global supply. 

In 2022, researchers estimated that demand for REEs is expected to increase by a factor of seven by 2040, as the global transition to renewable energy accelerates.   

The largest REE mines in production are found in China, which accounts for 60% of global production and about 85-90% of global REE processing. The US, Myanmar,  Australia, Nigeria and Thailand also have large mines. 

China’s dominance was achieved through decades of state investment, subsidies, cheap labour, and significantly lower regulatory and environmental standards. Intense internal competition, innovation and R&D spending has further helped the country position itself far ahead of other countries, and manage to process REEs at a fraction of the cost. This has forced other companies out of business for the processing part of the supply-chain. China has at times placed barriers to exports of technologies for processing rare earths in response to geo-political tensions. 

How Can Supply Be Augmented?  

There are aggressive efforts to explore new mines and processing capabilities outside of China. 

Australia and the US are strengthening local REE capabilities. Strategic partnerships exist between the US, Australia, Canada, Myanmar, Pakistan, Ukraine, India, and the EU to accelerate investment in reserves and processing capabilities. REE projects have decadal lead times, and it takes years before new production can commence. 

Brazil has REE reserves and has emerged as a major challenger to China. However, long lead times mean that global supply from Brazilian mines cannot be significantly augmented anytime soon.

Interestingly, there is potential to recycle REEs, a key circular economy strategy. Cumulatively, the highest potential yields of recycled REEs come from disk drives, wind turbines and electric vehicles, followed by phones, laptops, and medical devices.  

Currently, however, only 1% of REEs are recycled. 

This is because recycling is still not cost-effective relative to new mining. REEs are found in low concentrations in electronic waste and magnets, and are combined with other materials, making them hard to separate. Current separation technologies are energy-intensive and use large volumes of chemicals. 

New technologies are being developed to make REE recycling more efficient. Given the expected supply shortages, recycling incentives may grow, and organizations like the US Critical Materials Institute (CMI) are leading the research in this area. If these methods become commercially viable, dependence on mining could be reduced.  

Mining is often more harmful to the environment, since it involves radioactive materials and large-scale land disruption. While recycling has its own environmental costs, it avoids some of the worst impacts of mining and could become a more sustainable option over time.

The most immediate and cheapest option available to all countries remains reducing overall demand for REEs. For example, governments can promote clean energy-powered public transportation, which will reduce demand for electric vehicles. Incentives for consumers to use refurbished electronics like mobile phones, batteries, and TVs  will reduce demand for new devices. Multiple other circular economy strategies can be deployed to reduce the demand for additional REE mining.  

Featured image: Wikimedia Commons.